Obama's cyber 'state of emergency' yields no quick sanctions

By Sean Lyngaas

May 26, 2016

In April 2015, President Barack Obama declared foreign cyber threats a national emergency and gave the Treasury Department enhanced powers to target adversaries in cyberspace. Yet in the first five months with that greater authority, Treasury had yet to use it, according to a newly released report.

"No entities or individuals have been designated pursuant to" Obama's executive order, Treasury Secretary Jacob Lew wrote in an update to Congress that covered the period of April 1 to Sept. 9, 2015. Steven Aftergood of the Federation of American Scientists obtained the report via a Freedom of Information Act request.

Four categories of cyber behavior could trigger sanctions under the executive order: harming critical infrastructure services; "significantly disrupting" a computer network; stealing intellectual property or financial information; and using such trade secrets for commercial gain.

It is unclear whether Treasury has refined how it determines sanctions targets since Lew's letter. In a statement to FCW, the department said it does not comment on the existence of possible or pending sanctions investigations.

Treasury's Office of Foreign Assets Control "continues to work to implement and enforce our sanctions regimes, and exercises vigilance in detecting and responding to potential sanctions violations," the statement said.

Those who welcomed the executive order said the administration's implementation of it was telling.

"While the president made an important declaration by issuing the executive order, [Lew's report to Congress] highlights the challenges of implementing such a policy in the cyber arena," said Chris Cummiskey, a former Department of Homeland Security official who has worked on federal responses to cyber breaches. "Most of the worst actors reside well outside the reach of U.S. law," he told FCW.

Stewart Baker, another former DHS official versed in U.S. cyber policy, said he was disappointed by the lack of sanctions imposed in the months after the executive order.

"Maybe those of us who praised the order when it came out should have paid more attention to the fact that it was published on April Fools' Day," he quipped.

The lack of sanctions issued under Obama's executive order notwithstanding, the Justice Department has indicted Iranian and Chinese nationals for allegedly hacking U.S. assets. Legislation pending in Congress would urge the administration to impose sanctions on hackers with ties to the Iranian government.

In January 2015, three months before the executive order, Treasury sanctioned North Korean officials in retaliation for the hack of Sony Pictures Entertainment.